Policy
Extraordinary contractual authority under Pub. L. 85-804 must be used only as a last resort, with care and restraint, and never when standard legal remedies are available.
Overview
FAR 50.101-2 outlines the policy governing the use of extraordinary contractual authority granted by Public Law 85-804. This authority allows agencies to take certain actions in the interest of national defense, but its use is strictly limited to prevent abuse. The regulation prohibits using this authority in ways that encourage carelessness or when other adequate legal remedies exist. It also requires that actions under this authority be executed promptly, with careful judgment and restraint. Additionally, the section clarifies that some types of contract relief, such as rescission or reformation for mutual mistake, are now available under standard contract disputes procedures (41 U.S.C. chapter 71), and those procedures (FAR Part 33) should be used before considering extraordinary relief under FAR Subpart 50.1. Contracting officers are advised to seek legal counsel if unsure which authority applies.
Key Rules
- Prohibition on Encouraging Carelessness
- Extraordinary authority must not be used in a way that promotes laxity or carelessness in defense contracting.
- Preference for Existing Legal Remedies
- Agencies must use other adequate legal authorities before relying on Pub. L. 85-804.
- Expeditious and Judicious Action
- Actions under this authority must be taken quickly but with appropriate care and sound judgment.
- Use of Standard Disputes Procedures
- Relief such as rescission or reformation for mutual mistake should be sought under FAR Part 33 before using extraordinary authority.
Responsibilities
- Contracting Officers: Must avoid misuse of extraordinary authority, prioritize standard legal remedies, act promptly and judiciously, and seek legal advice when in doubt.
- Contractors: Should be aware that extraordinary relief is limited and standard dispute processes are preferred.
- Agencies: Must oversee proper use of extraordinary authority and ensure compliance with legal priorities.
Practical Implications
- This policy ensures extraordinary authority is a last resort, not a shortcut, and maintains discipline in defense contracting. It impacts daily contracting by requiring careful consideration of available remedies and legal processes, with common pitfalls including misuse of authority or bypassing standard dispute resolution procedures.